Trouble at Britain's oldest tea company on edge of administration

One of Britain's oldest tea companies has trouble brewing and is on the edge of administration, it was revealed today.

Typhoo Tea has filed notice that it intends to appoint administrators after finding itself £70 million in debt and facing multiple setbacks including increased competition and a high-profile break-in.

The firm has struggled with a decline in sales, attributed to customers switching brands or drinks altogether, instead opting for coffee, energy drinks or bubble tea alternatives.

Typhoo Tea was founded in 1903 by Birmingham grocer John Summer, and has previously been one of the UK's best selling tea brands.

It's now run by CEO Dave McNulty, who used to run the snack brand Burt's crisps. 

The company's sales declined from £34 million in 2022 to £25 million last year, losses rose from £9.7 million in 2022 to £38 million in 2023.

It comes amid nationwide forecasts which show Brits will continue to cut down on tea consumption in the coming years. 

But despite filing in the courts to appoint administrators from EY, it is understood the firm is hoping to explore rescue options. 

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Typhoo has been hit by a series of setbacks in recent years and rising costs as it seeks to become a more ethical brand.

Amid the cost of living crisis, shoppers are increasingly switching from brands such as Typhoo, PG Tips and Twinings for cheaper supermarket alternatives.

And tea sales fell by 4.3 percent last year - although Typhoo's sales actually rose due to its prices being cheaper than most other brands.

Typhoo's debts reached £73 million in September 2023. 

Overall its tea sales are still in decline and tea consumption is expected to fall by eight percent by 2028.

Typhoo also suffered after a break-in at one of its factories in Merseyside, which was used to store expensive equipment and tea stock.

The raid caused 'extensive damage' to both, with Typhoo having to spend £24 million to repair the damage and boost stocks.

The planned sale of the factory was also delayed by the incident, although was completed by June this year.

Further afield, Typhoo has recently gone from working with 300 tea plantations in East Africa to just three.

It's part of a push launched as the new CEO took over to overhaul its supply chain and stop sexual violence against women at the plantations.

Typhoo has warned prices could rise as a result.  

Dave McNulty, chief executive of Typhoo, said: 'This action has been taken to enable us to pursue a sale of the business. A further statement will be issued in due course with further information.'